Publications
One Year of COVID-19: The Government’s Efforts To Address CARES Act Fraud
April 26, 2021
In 2021, the U.S. government announced the first civil settlement with a company regarding CARES Act fraud. The government’s novel use of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 in that case bears watching, as the act provides significantly wider enforcement capabilities than does the traditionally used False Claims Act, including a lower burden of proof for violations, longer statutes of limitation and higher potential fines for companies found to commit fraud.
Updated Guide to the Main Street Lending Program
As of June 10, 2020
The Main Street lending program administered by the Federal Reserve will facilitate hundreds of billions of dollars of low-interest loans to a wide range of businesses in an effort to support the economy during the pandemic. This guide explains how the program will work, who is eligible, and the key restrictions and conditions that will apply to its participants.
During this time of increased economic uncertainty, the CFTC is providing regulatory flexibility with respect to initial margin rules and non-U.S. commodity pool operators.
On May 28, 2020, the Commission unanimously approved an interim final rule extending the Phase 5 compliance deadline for its initial margin requirements for uncleared swaps by one year to September 1, 2021, in response to the operational challenges for compliance caused by the COVID-19 pandemic.
The CFTC also unanimously approved a proposed rule allowing non-U.S. commodity pool operators to claim the “3.10 Exemption” from registration on a pool-by-pool basis with respect to commodity pools for non-U.S. investors and concurrently with other available relief from registration.
IRS Provides Relief for Renewable Energy Developers Encountering Construction Delays
May 29, 2020
Developers of renewable energy facilities that could experience construction delays due to the COVID-19 pandemic may receive important tax relief from the IRS’ recent relaxation of certain “begun construction” requirements. Learn more about how Notice 2020-41 may allow taxpayers to claim production and investment tax credits despite these delays.
Paycheck Protection Program: An Overview of Fair Lending Risks
May 19, 2020
While Congress deliberates whether to further expand the Paycheck Protection Program or other small business initiatives, lenders may wish to assess their fair lending compliance management systems and consider fair lending testing for such programs, to satisfy regulatory expectations and mitigate risk. This article summarizes recent agency guidance regarding consumer compliance issues in connection with PPP loans, as well as the fair lending legal background, and identifies key matters to consider in these areas when making small business loans.
Enforcement Risks and the CARES Act
May 14, 2020
Businesses that receive assistance under the CARES Act may be subject to enhanced scrutiny of their actions, even if not directly related to CARES Act assistance. Veteran authorities are already reviewing use of the Paycheck Protection Program as well as the relevance of the False Claims Act, while new agencies, including the Pandemic Response Accountability Committee, the Congressional Oversight Commission, the Special Inspector General for Pandemic Response and the House Select Subcommittee on the Coronavirus Crisis, are beginning oversight measures. Congress, the DOJ, inspectors general, federal regulators, state authorities, private litigants and the media can all be expected to take a view on facets of CARES Act programs; and the regulatory enforcement investigations that could result may last after relief assistance is terminated. Both financial institutions involved in administering CARES Act programs and companies receiving program assistance should ensure that they have appropriate measures in place to maintain compliance with all applicable rules and regulations.
Financial Relief Under the CARES Act for US-Incorporated Subsidiaries of Foreign Companies
April 15, 2020
On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act into law. The CARES Act provides financial relief to businesses in the United States. While most of the aid is intended for U.S.-based businesses, U.S.-incorporated subsidiaries of foreign companies also appear to be eligible.
COVID-19: Germany Update — Corporate Liquidity Issues in the Time of the Coronavirus Crisis
April 14, 2020
This article focuses on financing issues and opportunities for German companies during the coronavirus pandemic, specifically in respect of existing loans, new loans supported by KfW (the German state-owned development bank) and equity measures of the German Economic Stabilization Fund (Wirtschaftsstabilisierungsfonds).
Guide to the Federal Reserve's Main Street and Other Lending Programs in Response to COVID-19 Pandemic
April 13, 2020
The Federal Reserve has announced a series of emergency programs to provide more than $2.3 trillion of loans and financing to support the U.S. economy during the COVID-19 pandemic. These include the Main Street programs, which will provide Federal Reserve financing for direct, low-interest loans by banks to medium-sized business across industries. This guide summarizes the Federal Reserve's Main Street and other emergency lending programs, including their eligibility criteria, basic structures, key economic terms and important conditions associated with participation.
Federal Reserve Liquidity Programs To Support US Economy During COVID-19 Pandemic — Highlights for Funds and BDCs
April 7, 2020
The Federal Reserve has established a number of market stability and liquidity programs in response to the market upheaval caused by the coronavirus/COVID-19 pandemic. Many of the programs may be of interest to funds, both registered investment companies and private funds, and business development companies.
COVID-19 Pandemic Small Business Lending Under the CARES Act’s Paycheck Protection Program
April 6, 2020
The CARES Act authorized $349 billion for the Small Business Administration to guarantee loans under the Small Business Act. Importantly, the CARES Act amended the Small Business Act by creating the Paycheck Protection Program and provides for forgiveness of up to 100% of the full principal amount of the qualifying loans guaranteed under the program. Businesses considering applying for a loan under the new program should understand the eligibility, terms and other considerations of the Paycheck Protection Program before applying.
CARES Act Tax Considerations
April 2, 2020
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020, and included tax relief provisions intended to ease the financial burden on many companies affected by COVID-19. However, numerous issues remain unaddressed, and some issues that were included may benefit from future legislation or regulatory action.
Labor and Employment-Related Ordinances Pursuant to the Emergency Bill To Combat the COVID-19 Crisis
March 31, 2020
The French government, in response to its publication of the Emergency Bill To Combat the COVID-19 Crisis, further released three labor and employment-related ordinances on March 26, 2020, to protect French economic and social continuity. The temporary regulations allow companies in certain key business sectors to modify paid leave days as well as schedule additional working hours and adopt voluntary ones. The new rules also permit employers, regardless of their business sector, to access increased reimbursements when temporary layoffs are required.
UK Announces Measures To Support Businesses Impacted by Coronavirus/COVID-19
March 31, 2020
In response to potential job losses as a result of the COVID-19 pandemic, the U.K. announced measures to help employers and employees receive financial assistance.
CARES Act Increases Deductions for Certain Charitable Contributions
March 30, 2020
The Coronavirus Aid, Relief and Economic Security Act, enacted on March 27, 2020, provides individual and corporate taxpayers with increased charitable contribution deductions for cash contributions made to most public charities during the 2020 calendar year. Most individuals can deduct an amount equal to their adjusted gross income, and the allowable deduction for corporations is more than doubled.
CARES Act Provides Payroll Relief and Compensation Restrictions
March 30, 2020
The CARES Act includes a variety of compensation restrictions and payroll relief measures for employers and employees. This mailing reviews and analyzes those provisions.
Federal Reserve Lending Programs to Support U.S. Economy During COVID-19 Pandemic
March 29, 2020
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) became law on March 27, 2020. The economic stimulus package in the CARES Act includes federal funding for business stimulus across three broad categories: (i) grants and direct lending dedicated to specific sectors, such as airlines and national security businesses; (ii) expanded eligibility and payroll support for small businesses through programs administered by the Small Business Administration (SBA); and (iii) Treasury funding for several lending programs administered with the Federal Reserve. More than $450 billion of the allocated funds is directed toward this last category, which is the focus of this summary. The table below summarizes eight programs recently announced, expanded or expected by the Federal Reserve in response to the COVID-19 pandemic.
CARES Act Provides Much-Needed Stimulus for U.S. Businesses, Individuals
March 27, 2020
On March 27, 2020, Congress approved the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide financial assistance to individuals and businesses, which in aggregate greatly exceeds the financial package Congress previously enacted to address the 2008 financial crisis. The act, which is the third major piece of bipartisan legislation to address the crisis created by the COVID-19 pandemic, includes approximately $2 trillion in assistance to individual and businesses. A total of $500 billion is authorized for direct loans and guarantees, of which $454 billion is provided to the Federal Reserve to support its lending facilities and $29 billion will be for direct lending to passenger and cargo air carriers. An additional $367 billion is available to assist small businesses through the Small Business Administration (SBA). In addition, the act contains a number of provisions aimed at granting temporary regulatory relief. Despite the enormity of the assistance provided by the CARES Act, additional financial assistance legislation is expected if the duration of the national emergency extends beyond a short period of time.
In Response to COVID-19, Federal Reserve Establishes ‘TALF 2.0’
March 24, 2020
As part of its response to support the flow of credit to consumers and businesses in the face of the COVID-19 pandemic, the Federal Reserve announced the establishment of the Term Asset-Backed Securities Loan Facility. The TALF makes government financing available to private investors to purchase consumer asset-backed securities. The new TALF is being built upon the framework of the original TALF program established in response to the financial crisis in 2008 and will make up to $100 billion of loans available in the form of nonrecourse, three-year loans fully secured by eligible ABS.
UK Announces COVID-19 Job Retention Scheme
March 23, 2020
In response to potential job losses as a result of the COVID-19 pandemic, the U.K. announced measures to help employers and employees receive financial assistance.
France’s Lockdown and Economic Measures in Response to the COVID-19 Epidemic
March 17, 2020
As COVID-19 continues to spread throughout France, the government has adopted lockdown measures limiting the movement of individuals throughout the country, as well as ordering the temporary closure of certain businesses. The government also has announced financial measures aimed at helping businesses cope with this unprecedented situation.
See all our COVID-19 publications and webinars.